John Chiang has been our state controller for a few years now and is running for treasurer. I've long respected his integrity, which is why I voted for him (by mail ballot) in this election. This blurb from today, not being talked about at all in the big media, shows that my faith is not misplaced:
State Controller John Chiang dropped a political bomb the other day, although he was so quiet about it, one could say it was a stealth bomb.That $198.2 billion is more than the annual state budget. California is doomed, as is my retirement.
Chiang added public pension systems to his already large fiscal database. One chart reveals that their “unfunded liabilities” – the gap between assets and liabilities for current and future pensions – exploded from $6.3 billion in 2003 to $198.2 billion in 2013.
Los Angeles’ city pension system dropped its assumed earnings, called the “discount rate,” last week. The board of California’s second largest pension system, covering teachers, was told last month by a panel of experts that its 7.5 percent assumption is likely to be under 7 percent for the next decade.
If a 7.5 percent discount rate, which is also used by the giant California Public Employees’ Retirement System and many local systems, is too high, the current $198.2 billion debt in Chiang’s report is, in reality, much higher.